Saturday, November 22, 2014

Thanks Go Again To My Commenters, Here: Another Revision To Cholesterol/Heart Guidelines In The Offing?

Many of my best leads for new stories come from comments I receive, privately, or here (or on the back-up site) in the comment box.

Today's story is straight from that latter source, offered just yesterday. [I've also answered some pro-Zetia® commenters on the backup site, during the week -- as a result of the IMPROVE-IT outcomes.] I think many doctors find the new guidelines too hard to distill -- to a simple, patient friendly sort of sound-bite. So I do suspect they will be rewritten. I am not so sure they will return to the specific "60 or lower" type of simplicity.

The emerging evidence in the scientific world is clearly more complicated and nuanced than such a sound bite might imply. And the results of IMPROVE-IT are too modest (see graphic, at right) to make a single simple goal number the end of the chase, in my opinion. So I bet we will see new guidelines for the second time in two years, some time next year. But they won't be a "prescribe Vytorin® or Zetia® over all" type of pronouncement. That much is certain. Here is FiercePharma, on it all:

. . . .Among drugmakers, there are potential winners and losers, whichever way doctors land. Merck's Zetia and Vytorin, which combines Zetia with its statin Zocor, have seen falling sales, combined about $4 billion last year. The two were written off by some analysts after the guidelines changed last year.Those guidelines moved away from basing drugs on getting LDL below a specific to prescribing statins for patients at high risk because they share a family history, or smoke, for example, with those at the higher risk, like diabetes patients, getting the highest doses. The new rules meant a lot of people not taking statins should be prescribed them, favoring drugs like generic Lipitor, but not drugs like Zetia. . . . [A]lso standing to win is a new class of drugs, PCSK9 inhibitors, that are designed to lower LDL by more than 50%. Amgen, Regeneron and Sanofi are working in that arena.

Dr. Matthew Sorrentino, a preventive cardiologist at University of Chicago Medicine, told Reuters he relies on the new guidelines but understands the appeal of having a specific LDL target to shoot for. "Almost everybody knew what the LDL target was," he said. "I can see making the guidelines easier to follow. . . ."

In any event, the Zetia portion goes generic in 2016. So, whatever else happens, it will be short lived, for Merck. You heard it here first. Now, go enjoy your cardio-workouts, healthy diets and low stress lifestyles -- and avoid these pills entirely! Smile!

Wednesday, November 19, 2014

Jefferies & Co. Price Target For Merck Has "See-Sawed" Between $63 And $60 -- For 18 Months Now

Just yesterday, analysts at Jefferies kept their Neutral or Hold view on Merck, but took the 12 month price target north -- from $60, to $63.

Not even two months ago, in early October of this year, Jefferies dropped its target from $62 to $60 -- perhaps on concerns about the impending IMPROVE-IT results disclosures. Now that IMPROVE-IT is essentially harmless to slightly positive news, it seems, Jefferies is back up at $63. But this is the money quote, from my perspective:

. . . .stock [will remain] range bound. . . .

So expect more see-sawing, in the narrow 12 month target band between $63 and $60, from this truly independent analyst shop. Jefferies seeks no i-banking business from Merck, so it is -- in my view, at least -- truly independent of the endless offers of tens of millions of dollars in fees (for things like M&A advisory, or debt or equity underwriting, for example) Merck might slide its way.

And as we've seen, when Deutsche jumps the couch and hangs a $65 on the name, it gets rewarded -- by dint of dark magic, no less -- with a "left hand" lead, on a huge Merck debt deal -- just a few weeks later. And that means serious, serious fees for scarcely any work.

Not so with Jefferies. And to be clear, I do believe Deutsche has still complied with SEC Reg AC here. It is just a weak regulation, that's all. All the bank has to say is that it actually believes the rating it has assigned. And I'm sure it does.

Tuesday, November 18, 2014

Gilead's Latest Brief -- To Protect Its Sovaldi® Franchise, From A Perhaps 10 Per Cent Royalty Charge, From Merck

Quite quietly yesterday, in the federal trial courthouse in the Northern District of California (San Jose), Gilead filed its latest brief -- setting out its argument to fend off a patent royalty demand from Merck (and Isis, its recently acquired sub), on its sofosbuvir, branded as Solvaldi®.

I'll link the entire 32 page PDF here -- and quote just a bit of it, below.

. . . .When it became clear that [Gilead's] 2’ fluoro/methyl and phosphoramidate design as embodied in sofosbuvir would forever alter the landscape of HCV treatment, Merck came knocking on Gilead’s door with its two patents in hand. Merck demanded an astounding 10% royalty on future sales of sofosbuvir. . . . Merck demanded that royalty despite knowing that it sells no product covered by those patents, and that neither it nor its collaborator Isis played any role in the series of innovations that resulted in sofosbuvir [branded as Sovaldi]. . . .

[Merck's] ’499 and ’712 patents teach a class of drug molecules that can be synthesized and provided to patients to treat HCV, either as themselves or in the form of certain identified prodrugs. Gilead asks this court to construe the asserted claims consistent with those teachings and true to the scope of [Merck's] alleged inventions. . . . lab inventions. . . .

[The Merck/Isis patent] claims and written description never — in words or figures — describe compounds produced in the body. In stark contrast, the patents include columns of text describing how compounds and their pharmaceutically acceptable salts or specific prodrug forms can be made in the lab, and how those synthetic compounds may be combined with other drugs at the time they are given to patients for therapy. The patents lack any description about how the body may transform any of the described compounds or prodrugs, or what form those transformed compounds or prodrugs would take, let alone describe that the claimed “compounds” are generated inside the body. . . .

. . . .The following diagram illustrates some of the steps the body takes to transform sofosbuvir into the active triphosphate analog:

Actually, this wide ranging, global patent spat is more likely to lead to a material outcome for these two companies -- overall, than Merck's recent IMPROVE-IT results to and fro'. This could be as much as $25 billion in new revenue for Merck, or it could be a loss of some $100 million in legal fees, over the ensuing next three or four years. It is being fought in the federal courts on both coasts, here -- in the United Kingdom and the EU -- as well as Japan, if memory serves.

IMPROVE-IT: What Does "Only A Modest Benefit" Mean? It Means The Economics Of Vytorin® Treatment... May Not Make Sense.

At the outset, I do not mean to cheapen human life, by reducing the entire analysis to dollars and. . . sense.

However, the PIs of the IMPROVE-IT study admit that the results suggest that one MI hospitalization event (for example) would likely be avoided over seven years, by putting 50 patients on Vytorin® (as opposed to simvastatin, or any statin as mono-threapy).

A month's supply of Vytorin costs $200 at CVS -- a statin costs $15 for that same month's supply.

So. . . ($200 minus $15, or $185), times 12 months times 7 years, times 50 patients. . . equals $777,000 in additional drug costs.

It looks like the recent average US cost for an acute myocardial infarction hospital admission was around $30,000. So I guess Merck's marketing thought is that -- based on IMPROVE-IT's data -- we should pay an incremental $777,000 over seven years, to prevent one additional $30,000 hospital admission.

That math doesn't really work, from a clinical stand-point.

Please tell me what I'm missing here. I must be mistaken. [But I bet I'm not.]

Monday, November 17, 2014

What One SMART Caridologist Is Telling Her Patients -- About IMPROVE-IT

Do go read it all, from Dr. Melissa Walton-Shirley -- over at MedScape -- but here is the most sobering bit:

. . . .What we don't know is that once your LDL is below 70, is it cost-effective to lower it to the 50s? Again, it appears your death rate is the same at LDL levels of 50, 55, 60, 65, 69, etc. High-dose simvastatin (and in some cases low-dose simvastatin) can produce similar results, or, heaven forbid, even using another statin. . . .

I can nearly guarantee you that instead of a one in 50 chance that this compound will help you, there is a nearly 100% chance that the Mediterranean diet and a 30-minute walk daily will drop your death rate by 50%. Plus, I'll help your osteoporosis risk, lower your blood pressure, and decrease your risk of developing diabetes. Your quality-of-life indicators will improve. Shortness of air will improve. Heck, it can even cure diabetes in some.

So will our patients rather take an extra pill or buy a treadmill and use it?. . . .

Yes -- too many Americans prefer pills -- to exercise and diets. The price makes the horse, in so many ways.

Merck Meets Primary Endpoint In IMPROVE-IT -- Full Results At Noon

No way to know the magnitude of the effect, yet. UPDATED: Only a small effect, but positive -- barely statistically significant, or more. . . robust?

Press releases embargoed until 11:45 EST. More then. UPDATE: Larry Husten, over at Forbes, is on it!

. . . .The benefit wasn’t very big or impressive but it will be enough to put to rest concerns that ezetimibe might have been an expensive placebo. . . .

The investigators calculated that 50 patients would need to be treated for seven years to prevent one event. There was no difference between the groups in overall deaths, coronary deaths, or cardiovascular deaths, but there were significant reductions in MI (13%, p =0.002), stroke (14%, p=0.052), and ischemic stroke (21%, p=0.008). . . .

UPDATED: So I think the question becomes. . . is the added cost of higher priced combo pills worth the above effect? That's a debate for the ages.

As reported by Larry, Dr. Steve Nissen (long skeptical of Vytorin's cost to benefit ratio) said that while the trial result was trustworthy, and that the trial was well conducted -- the modest effect left him wondering “when have you ever seen a risk reduction as small as 6%?” He noted that the trial was powered to detect a 9% difference but got only a 6% reduction. Said another way, you'd need to treat 350 patients for a year to see one avoided MI event. Smallish, indeed.

Stay warm and healthy, one and all. Noon: Merck common stock is rising, but only a fraction of a per cent, on moderately light volume on the NYSE -- which confirms the above -- not a world beater.

Saturday, November 15, 2014

NJ Judge Hears Argument; Reserves Decision On Motion To Dismiss Kean University Claims To Legacy Schering-Plough Facility

We last looked in on this spat two weeks ago -- and after two hours of motion practice in the Superior Court, the matter was taken under advisement. Elizabeth (NJ) Superior Court Judge Katherine Dupuis will rule at some future date on the developer's motion to dismiss the Kean claims.

At the heart of this dispute, for the locals, is whether their township government will be able keep the huge tract on its real estate tax rolls. If the developer wins, taxes continue to flow. If the University wins, the land goes off of the taxable rolls, since Kean is a tax-exempt entity. So local public schools, water and sewer service, road repairs, snow plowing and garbage collection will be impacted there, almost certainly, with a win for the University.

From the Union News Daily then -- in New Jersey:

. . . .According to sources attending the hearing, lawyers for Russo, Kean University and the township argued their respective points for two hours before Dupuis, but a final decision was not forthcoming. This means the judge will review both legal arguments and make a decision at a future date. When that will be, though, is unknown.

John Schmidt, an attorney representing the university, maintained in court that John Kean, a surviving descendant, retained the right of first refusal through his family.

The Kean family has maintained throughout months of legal wrangling that they had every right to transfer the right of first refusal to the university and the court should uphold the university’s legal right to buy the land. . . .

So we wait, yet again. Enjoying a blowing and snowy Saturday night here. Even so, Monday's IMPROVE-IT disclosure will be big news, for Merck.

Friday, November 14, 2014

Forbes' Matt Herper Offers His Very Cogent Take -- On Monday's IMPROVE-IT Outcome Scenarios

Well, we are just a little more than three days away from learning what that decade long study will teach us about the "lower is always better" hypothesis -- on LDL cholesterol levels -- vis a vis actual clinical outcomes. And every smart journalist I know in the field has a piece up, about what to expect. Even so, Matt's is among the best. [Ed Silverman deserves a highly honorable mention here too.]

Below is a bit of Matt's nuanced piece, along with the portion I too think captures the most probable event, come Monday -- do go read it all, but here is a bit:

. . . .In other words, the Vytorin story has made the FDA nervous not about heart drugs, but all drugs. And, for that reason, the IMPROVE-IT result could help shape the industry.

There are basically only three things that can happen on Monday. . . .

2. We Get Mud. This is what I and a lot of cardiologists I’ve spoken to over the past seven years about this trial expect. The idea is that the study would fail on its main goal because Zetia’s effect is weak and other factors make it hard to pick up, including patients dropping out of the study or switching to higher potency drugs like Crestor or Lipitor. But an analysis that only looks at patients who stayed in the study might show a benefit – or at least a trend to one. This will leave experts arguing over what the results mean, and will leave Vytorin and Zetia in their current state of limbo – do they work or not? – forever. . . .
We will offer our post-mortem thoughts, after the press releases, on Monday. I'm off to an early Friday start, now -- my best, to all of you!

Wednesday, November 12, 2014

Benefitting From A Life-Long Gene Mutation Is NOT Equivalent To Taking A Drug -- Beginning In One's 60s -- Post Heart Disease

Some lesser lights, including those at Yahoo! News, are running a story about a NEJM published study today, and drawing deeply suspect corallaries to Zetia and IMPROVE-IT.

Higher thinking news outlets -- like the Boston Globe and Bloomberg -- are running the gene mutation study story for what it is: a gene mutation study. Not a proxy for IMPROVE-IT. See below:

. . . .“Lifelong inhibition is different than giving the drug to someone in their 60s and trying to prevent a second heart attack, which is what the study is doing,” Kathiresan said. “The natural experiment is quite different from the drug experiment,” and doesn’t carry the risk of side effects, he said. . . .

Look -- I'm not a serious scientist, but I can see that giving a pill to someone at midlife (when they already are showing the precursors for heart disease) cannot be equated to having healthier genes, one's whole life long. I get it. Billions are riding on this. But this grasping at a predictor/proxy for IMPROVE-IT's outcome has veered into the realm of the truly preposterous.

Tuesday, November 11, 2014

It Is Increasingly Likely That Gilead v. Merck/Idenix Patent Spat Will Be Resolved In ADR: December 8, 2014 Status

In the federal District Courthouse in Delaware, the patent suit pending over Gilead's Sovaldi patents, and the claimed 10 per cent of revenue royalties, the trial judge has just entered an order, requiring parties and counsel to appear to discuss ADR on the morning of December 8, 2014. Back in August 2014, he tried mediation -- so, either this is an update, or a new approach -- a new process, being encouraged by the able District Court judge.

In sum, ADR is alternativie dispute resolution, by a panel of referees, by mediation, or by a "coach" -- or some other form of negotiated settlement discussion -- entirely outside ot the judicial process. Typically the judge will not (and usually cannot) impose a binding order sending the parties to ADR, but he will very strongly suggest that the two sides ought to resolve their differences in a less formal, and less expensive way -- than litigation. I think it likely that the claim construction dispute will go to an ADR panel of highly qualified patent law experts -- ones that both sides respect; ones that are considered preeminent, neutral and pragmatic lawyers. That's my bet. Here's the order, from Delaware, entered on last Friday:

. . . .A Telephone Conference is set for [12/8/2014] at 10:15 AM before Judge Christopher J. Burke to discuss ADR. Signed by Judge Christopher J. Burke on [11/7/2014]. Associated Cases: 1:14-cv-00109-LPS, 1:14-cv-00846-LPS-CJB(dlk). . .

As ever, we will keep you posted -- but the whole battle here likely turns on how one construes the word "administering" and the word "compound". That's a perhaps $10 billion set of definitions. Wow.

And in closing, please. . . Honor all vets, today -- one and all. They have handed us these freedoms we enjoy -- with their very lives.

Monday, November 10, 2014

SEC Filings Speak Only "As Of" Their Dates

Some -- including the very smart Pete Loftus -- in the Wall Street Journal, are making note of the Merck SEC Form 10-Q filing of this morning.

In the Form 10-Q, Merck says it has determined that the Zetia® and Vytorin® intangible assets are not impaired (by the unblinded data in IMPROVE-IT, at page 35). All that means (to my experienced securities lawyer sensibilities) is that today -- i.e., before the November 17, 2014 presentation in Chicago, of fully vetted, analyzed and peer reviewed study results -- the unblinded data does not show obvious futility. It likewise doesn't show a harm to patients, otherwise the safety committee would have stopped it much earlier. No more -- and no less. That's all.

How the market reacts to the data, on the other hand, may in fact impair the assets' value, at some future date. But as of today Merck says the asset is not impaired. That is all. Here's Pete's take:

. . . .Some analysts have speculated the Improve-It study will show that Vytorin isn’t significantly better than simvastatin alone. Prior studies have shown that while Vytorin can help reduce levels of bad cholesterol beyond what can be achieved by simvastatin alone, it hasn’t been proven to further reduce the risk of heart attacks and strokes compared with simvastatin alone. Zetia, which is also sold as a stand-alone drug, works by a different mechanism than simvastatin, a generic drug that belongs to a class of widely used cholesterol drugs known as statins.

Merck said in a filing Monday with the Securities and Exchange Commission that it has been “unblinded” to the study’s results. As recently as Oct. 27, Merck had said it was still “blinded” to the results, meaning it didn’t know how the outcomes of patients receiving Vytorin compared with those who received simvastatin alone. . . .

The SEC 10-Q also says: "Global sales of Vytorin (marketed outside the United States as Inegy), a combination product containing the active ingredients of both Zetia and Zocor (simvastatin), a statin for modifying cholesterol, were $369 million in the third quarter of 2014 and $1.1 billion in the first nine months of 2014, declines of 7% and 5%, respectively, compared with the same periods in 2013. Foreign exchange favorably affected global sales performance by 1% in both the third quarter and first nine months of 2014. The sales declines primarily reflect lower volumes in the United States. . . ." So -- we wait for November 17. I still expect additional reductions in the sales of the pair of drugs. And I expect over time, those reductions may be material.

UPDATED 11.11.14 11 AM EST: Ed Silverman, at Pharmalot, largely concurs, thus:
. . . .This could lead to another key issue – the possibility the trial yields a statistically significant outcome, yet the “magnitude” of a clinical benefit remains “marginal.” This would not, of course, help Merck very much.

Although this may remove an “overhang” on Merck stock, the outlook for Vytorin is unlikely to change much, or as Anderson puts it, it would be “too little, too late.” Why? Crestor, which is sold by AstraZeneca, matches Vytorin in reducing LDL cholesterol, offers cardiovascular benefits and, most of all, has not generated controversy. . . .

I suspect, myself, that the results will be just under statistical significance, but positive. Just barely positive. Even so, I expect continued erosion in the franchise for all the reasons we set out over the last six years.

No Four Week Cure For Hep C -- Merck & Gilead Announce, In Boston

Merck had hoped to cut treatment times with its NS3/4A protease inhibitor candidate, grazoprevir and its NS5A inhibitor candidate, elbasvir, in a mid-stage trial with Gilead's sofosbuvir, as a Hep C combo therapy. But to be clear, this doesn't mean the death of the programs at Merck, generally -- it just means that any hope that Merck could offer a shorter path to the cure, this way. . . likely won't pan out. So, the question becomes what competitive advantage can Merck's candidates hope to offer, head to head, against Gilead's juggernaut?

Not material, at all -- but that (head to head) looks like a dead letter. Per SeekinigAlpha:

. . . .At The Liver Meeting in Boston, Merck (NYSE:MRK) presented interim data on its triple-therapy regimen for HCV-1 infection. The investigational product combines the company's NS3/4A protease inhibitor, grazoprevir and its NS5A inhibitor, elbasvir, with Sovaldi (sofosbuvir). . . .

Recall also that Merck is seeking 10 per cent of all Gilead's revenue on Solvaldi® -- in various patent suits. "Keep your enemies. . . closer." Onward, to face. . . Monday!

Saturday, November 8, 2014

The Connections Between Bind Therapeutics And Whitehouse Station Run Much Deeper Than Press Releases

The CEO of Bind (depicted at right) is an ex-Baxter maven (as President Latin America/Pacific Rim, for Diagnostics Division). Also had some nice history at ALZA. Fascinating guy. Former Arch Venture Partners whiz too. . . .

It is likely that Merck's Dr. Permutter thinks highly of him and Bind, from his decade at Amgen. The connections run well beyond a simple oncology candidate target contract. Go read all of John Carroll's well-sourced piece in FierceBiotech, on the topic:

. . . .If Merck takes the lead, they "would pay us based on a multiple of the investment we had made to that point," notes Bind CEO Scott Minick.

Bind's deal with Amgen may not have paid out in the long term, but the relationship the biotech created with its then-external R&D chief Iain Dukes helped set the stage for this new pact with Merck. Merck hired ex-Amgen R&D chief Roger Perlmutter to run R&D, and Perlmutter then helped recruit Dukes to Merck. Merck was "thinking strategically on oncology, and we found a nice alignment of interests," Minick tells FierceBiotech. . . .

Off now, to a board meeting, then the North Woods. . . be excellent to one another, and go see "Interstellar".

Friday, November 7, 2014

Only Ten Days Until IMPROVE-IT Is Known -- And Larry (for Forbes) Has A GREAT Rundown!

Larry Husten is a smart guy, a good friend of the blog, and a very well-balanced, measured voice on all matters referenced in his article. And this event has been a decade in the making. I'll point to just two of our backgrounders -- here, also -- of dozens, just search IMPROVE-IT in the box at upper left, here.

Do go read it all. It is required reading if any of the readership wishes to understand what will transpire for Whitehouse Station, on the NYSE, on and after November 17, 2014. Here's just a bit:

. . . .The results of the trial–underway for nearly a decade– have been long and eagerly awaited by everyone interested in cardiovascular medicine. The trial could impact the future sales of a key Merck drug, ezetimibe, though because it is nearing the end of its patent life the commercial significance is somewhat limited. However, IMPROVE-IT will also have very important implications beyond its specific effect on one drug franchise and could influence the fate of several new drugs now being investigated and may even alter the entire drug development and evaluation process. . . .

My betting has long been that there will be either a null event, or a non-statistically significant benefit. Either way, I will expect continued (and perhaps accelerated) erosion in US Vytorin® and Zetia® sales. All of which may turn out to be immaterial to big Merck, now that patent expiry looms, on Zetia. If a null event is disclosed, it is jaw slacking that perhaps $20 billion of the combo and standalone drugs were sold, lifetime to date, and they then turn out to be (in the immortal words of Dr. Harlan Krumholz, of Yale). . . just "very expensive placebos." Goodness. Have a fabulous Friday, one and all! 'Tis very sunny in the City of Big Shoulders, today. . .

Wednesday, November 5, 2014

Zilmax® (Zilpaterol): Inching Its Way Back To US And Canadian Markets?

Prior (December 2013) background on this narrative is under that link. So, here's the latest update from Merck on the Zilmax® Five point plan -- FDA has green-lighted a lower dose label, per Reuters:

. . . .Merck said on Wednesday that the review by its advisory board was conducted after concerns that cattle could consume more Zilmax than approved.

An updated Zilmax label, with a lower dose, was approved by the U.S. Food and Drug Administration, Merck Animal Health said.

Merck wants to feed Zilmax to 240,000 U.S. cattle to prove it is safe. But giant meat processors like Cargill Inc. and Tyson Foods Inc don't want to touch animals fed with the drug, Reuters reported in April.

Merck Animal Health also filed to update Zilmax's label in Canada, it added. . . .

More of our background here. We will keep you informed, but I don't see US ranchers' widespread return to use of Zilmax, even as late as this coming spring of 2015. Not likely until the Tysons, ADMs and Cargills of the world say they will accept Zilmax-fed beef into the slaughterhouses. I guess the polite term is processing plants. In any event, now you know.

Monday, November 3, 2014

Legacy Schering-Plough Tax Base Erosion Politics: Morris Ave. Facility To Go Off Of The Local Tax Rolls -- To Kean University?

We have been covering this -- for over a year, now. Apparently legacy Schering-Plough purchased the now disputed lands and buildings from the Kean family in 1986, but in the process had to give a right of first refusal to a Kean family trust to buy it all back.

The Union, New Jersey township is concerned that a ruling in favor of Kean University here would take this mammoth chunk of otherwise taxable real estate off the tax rolls. So the township waits nervously. Now the developer who is offering a taxable future for the parcel is due in court, on a motion to dismiss the University's claim. That hearing is this Wednesday.

This is made all the more fascinating in that the heart of the dispute revolves around a seminal 1925 last will of a scion of one of the most prominent families in New Jersey philanthropy and politics. And so without additional ado here, then is a bit from the latest local papers' reports:

. . . .On Wednesday, Nov. 5, attorneys for developer John Russo of Russo Acquisitions are expected to go before Superior Court Judge Katherine Dupuis with a motion to dismiss the university’s claim that a covenant made in the last will and testament of John Kean, Stewart B. Kean and Mary Alice Reynolds, dated Jan. 16, 1925, is legally binding today.

According to information obtained by LocalSource, the legal team representing Kean University admitted [there is no written transfer document -- a deed or other conveyance -- to support their position] in court documents. Apparently they have nothing in writing that transferred the right of first refusal to John Kean, who in turn verbally handed over the right to the university.

Kean conceded they had no written proof that the covenant could be transferred to them, but maintained the will from 1925 clearly stated that the “heir of successor” and those assigned inherited this right of first refusal. Russo’s attorney, however, disagreed.

He maintained that in order for the covenant to legally continue there had to be “something in writing” from the Kean trust dating back to 1925 and anything less violates the law. . . .

We will let you know what transpires, on this legacy Schering-Plough matter. It will turn on whether any similar common law case has been decided in New jersey, on these sorts of fights -- and how that set of cases came out, I predict. We will all learn some New Jersey trusts and estates -- and real estate law, here -- no matter what.

Sunday, November 2, 2014

Gilead's Sovaldi® Patent Spat? Merck's Side Of The Story, Now

I've offerd a few earlier posts (here, too) -- setting out Gilead's side of this perhaps $10 billion argument, over Merck's demand that Gilead pay 10 per cent of all Sovaldi® revenue to Whitehouse Station.

So on this quiet Sunday morning, I'll offer Merck's view on these matters (and by way of incorporation, that of Idenix, Merck's newly-acquired subsidiary). Here is the full brief (a 17 page PDF file) Merck filed just last week, on how we ought to construe two words, in the disputed patents. Take a look:

. . . .Merck’s proposed constructions are grounded in the plain meaning of the claim language, the specifications of the patents-in-suit (i.e., intrinsic evidence), and first principles of claim construction as set forth by the Federal Circuit. For example, Merck’s proposed construction of “administering” is taken verbatim from the specification, which expressly defines the meaning of this term. Merck’s proposed construction of “compound” is grounded in the plain and ordinary meaning of the term, the usage of that term in the specifications of the patents-in-suit, and the meaning that other courts have construed the term “compound” to have, as discussed below.

In contrast, Gilead Sciences, Inc. (“Gilead”) asks the Court to “construe” the claim terms “administering” and “compound” in a manner that would effectively re-write the claims to include multiple new limitations that have no basis whatsoever in the meaning of those terms, either in general or as used in the specifications of the patents-in-suit. With regard to the claim term “administering,” Gilead asks the Court to negate the patents’ express definition of the term “administering” by adding no fewer than 24 extra words to that definition. With regard to the claim term “compound,” Gilead’s proposed construction departs from the plain and ordinary meaning of this term and conflicts with the way this term is used in the specifications of the patents-in-suit, and as such contravenes first principles of claim construction. . . .

I must note, as I close, that any argument which stems from Gilead using "too many words" (see bolded bit, above) -- to clarify and define its construction of the terms in dispute. . . strikes me as just a little. . . silly.

Afterall, I can think of one word -- "love" -- about which thousands upon thousands of books have been written, precisely to define the authors' intent -- in using and construing the word. Similarly it might be argued, "administering" and "compound" are words which are not self-defining. So it is not particularly illuminating to tell a federal District (trial) court judge in San Jose, California that Gilead uses "too many words" to reach its definition. At least, in my opinion.

In fact, when I say "I love you". . . you might need to ask me: do I mean Plato's version, or do I mean Beethoven's "Immortal Beloved" version -- or some other, entirely? That is what this suit is about, by analogy. Now go enjoy your sunny Sunday mornings, one and all.

Monday, October 27, 2014

Merck Q3 2014 Non-GAAP EPS "Beat" By $0.02 -- Revenue More Than A Little Shy

First the less-than-entirely rosey news: Merck is reducing its full year 2014 guidance range -- on worldwide sales. That is a down bubble, even with help from a bit of a currency tailwind in Q3 2014.

However, in the near term, at 2014 third quarter end, Merck is slightly "ahead" -- at the EPS line. [Because that beat is on a non-GAAP EPS measure, though -- it is more "controllable" (by Merck) than straight GAAP EPS.] Even so, all in all, not a bad quarter. The continued erosion in sales though is something to keep close tabs on. Strong Remicade and Simponi growth continued the trend established in Q2 2014. That's a bright spot, for certain. Here's the release, and some detail, by principal product lines:

. . . .Combined sales of JANUVIA and JANUMET, medicines that help lower blood sugar levels in adults with type 2 diabetes, grew 5 percent to $1.4 billion in the third quarter. The growth reflects higher sales in the United States and Europe, which were partially offset by price reductions in Japan.

Combined sales of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), medicines for lowering LDL cholesterol, declined 3 percent to $1.0 billion in the third quarter, driven by lower sales in the United States. [Ed. Note: 20 days to IMPROVE-IT read-out? We shall see (check countdown clock at left).]

Combined sales of REMICADE and SIMPONI, treatments for inflammatory diseases, grew 11 percent to $774 million in the third quarter, including a 2 percent positive impact from foreign exchange. Over the last 12 months, SIMPONI has been the fastest growing anti-TNF agent in all countries where marketed by Merck.

Merck’s sales of GARDASIL, a vaccine to help prevent certain diseases caused by four types of human papillomavirus, were $590 million, a decrease of 11 percent for the third quarter. The results reflect lower purchases in the U.S. public sector.

Worldwide sales of ISENTRESS, an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection, decreased 3 percent to $412 million in the third quarter. The decline reflects lower sales in the United States, partially offset by growth in Europe. . . .

Separately, Merck announced that Keytruda has received "breakthrough" designation at the US FDA, in hard to treat lung cancers. That is good news. In addition, we've learned that approximately 900 patients are receiving the immuno-biologic, for advanced melanoma (under the earlier US FDA approval for treating that cancer). It should be noted that there are side effects associated with the regimen (although generally fewer, and less severe, than seen with radiation or chemo treatments).

If anything surprising transpires on the actual call and webcast, we will update this post. Onward!

Sunday, October 26, 2014

A Merck Q3 2014 Non-GAAP EPS Guestimate? $0.88-$0.89 Per Share

The broader narrative story-line, on Merck's transition from legacy patent-cliffed medicines, to a brighter immuno and biologic candidates' driven future -- all in a much leaner, more agile enterprise-wide package -- is expected to continue to unfold, tomorrow at 7:30 am EDT, on the scheduled earnings call and web-cast.

I'd look for currency effects in the 2.0 to 2.5 per cent headwind range (as the dollar continued to strengthen against the euro and Yen -- much as J&J saw in velocity of increasing headwinds, around ten days ago, now), and some sense of how the limited Keytruda® melanoma roll out is ramping, but other than that -- much the same as Q2 2014 results call -- is my guess. Consensus is for 88 cents; maybe a penny "beat" -- at 89 cents. We shall see. Here's a bit, from Forbes, as of Friday afternoon:

. . . .Merck is forecast to post third-quarter earnings of 88 cents a share [tomorrow before the NYSE opens]. . . .

Of course we will listen in, so you don't have to. And (natch'!) we will report any truly material new narrative story line, as it emerges. Now go enjoy your quiet morning, with your coffee and OJ and banana. . . and yogurt, as we do here, on the high mountains ranch. Smile.

Friday, October 24, 2014

Q3 2014 Lobby Spend At Merck: $1.4075 Million -- Year To Date: $5.15 Million

Well, the pace is still running about one half of what it was last year.

But still a substantial amount -- with a great ROI, as the graphic at right would suggest. Almost no new matters on the lobbyists' agendas, for Whitehouse Station it would seem, this quarter -- except for a few new bills under consideration (bolded, below):

. . . .Alzheimer's education (no specific bill); 340B (no specific bill); National Diabetes Clinical Care Commission Act (H.R. 1074, S. 539); Diabetes Prevention & Treatment, including related provisions of HR 3322, The Eliminating Disparities in Diabetes Prevention, Access and Care Act of 2013 and HR 1074, The National Diabetes Clinical Care Commission Act; Hepatitis C education (no specific bill); adult vaccine policies (no specific bill); medication adherence (no specific bill); DISARM (H.R. 4187). . . .

Comprehensive tax reform (no specific bill); transfer pricing of intangibles (no specific bill); territorial tax system (no specific bill); deferral of taxation of foreign earned income (no specific bill); tax base erosion (no specific bill); R&D tax credit (no specific bill). . . .

Medicare Coverage and Reimbursement issues; Medicare access to DXA services, Medicare reimbursement for antimicrobial drugs, including related provisions in HR 4181, The Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms Act of 2014). . . .

MODDERN Cures Act of 2013 (H.R. 3116), Prescription Drug User Fee Act (general planning), 21st Century Cures (no specific bill), Strengthening Medicare Anti-Fraud Measures Act of 2013 (H.R. 2925), Big data (general education), Alzheimer's education (no specific bill), biosimilars (general education, no specific bill), general pharmaceutical industry issues and education. . . .

Trans-Pacific Partnership (no specific bill); biologic data exclusivity (no specific bill); trade promotion authority (no specific bill); treatment of intellectual property in India (no specific bill); Playing Fair on Trade and Innovation Act (HR 3167); additives in beef cattle (no specific bill); trade adjustment assistance (no specific bill); international trade barriers for beta-agonists (no specific bill). . . .

Deficit reduction (no specific bill); ADAP funding (no specific bill); omnibus appropriations; Patent reform (H.R. 3309, S. 1720 ); education on beta agonists (no specific bill). . . .

There you have it. Have a safe & fun pumpkin patch weekend, one and all! I know I will. . . .